Forecast 2001

CLIENTS WILL BE DEMANDING AND COMPETITORS A CHALLENGE, BUT THE EXPERTS EXPECT A STRONG YEAR FOR SPECIAL EVENTS

THE DELUGE of millennium events for New Year's 2000 never came through. Nonetheless, the new century started with a bang for the special event industry, with revenues projected to come in 17 percent higher in 2000 than in 1999, according to the latest research from Special Events Magazine. And the new year should keep up the pace. Nearly 80 percent of readers responding to our survey say they expect continued growth in 2001, at a rate of 15 percent on average over 2000 figures (see graphs, opposite).

PROBLEMS AND POSSIBILITIES One factor on the mind of the special event industry is the volatile stock market. The U.S. economy expanded in the third quarter of 2000 at the slowest pace in four years, according to the Commerce Department.

Prospects for economic growth in the 11 nations sharing the euro have fallen since reaching a 15-year peak in June, according to European Union business surveys reported by Bloomberg News in November.

Even so, event professionals see corporate events as their prime area for growth, according to the Special Events Magazine 2000 Subscriber Study. Further, most event professionals view the current sluggishness as a symptom of routine business cycles.

Headaches such as mergers and acquisitions among clients and the slowing of the high-tech market are "nothing new," says Stephen Denison, president of San Francisco-based McCall Associates, a catering and event management company. "You always need to be aware that changes happen and [to] have a diversified client mix. Corporate cultures change and event strategies change with a new regime."

Jitters in the business world have put new pressure on event professionals to deliver. "Less stupid money is being spent," Denison says. "More clients are seeking value. Our local corporate clients are still willing to spend the money; they just can't look frivolous doing it."

But special events are solid business tools in any economy, according to event producer Harith Wickrema, head of Harith Productions of Oreland, Pa. "In the next couple of years, we will certainly see growth in the field of incentives and employee recognition," he says. "There are opportunities with the dot-coms - with the stock market going down and stock options eroding - [they will host] events to retain employees and reduce attrition."

Even if the stock market has the hiccups, the social market is in full swing. Social events made up 35 percent of total event revenue in 2000, our study says, up 4.4 percent from 1999 figures.

THE COMPETITIVE CRUSH The No. 1 challenge event professionals expect to grapple with in the coming year is growing competition. "I am finding more and more people wanting to do events," says Frank Andonoplas, head of Bridal Consulting and Event Planning by Frank in Chicago. "Some have experience in a related field, others have no clue. That will not be a problem for established planners but will be rough on those just a few years into the business."

Deborah Borsum, CSEP, CMP, executive producer and co-owner of The Meetinghouse Companies, a decor firm based in Elmhurst, Ill., says: "One of the greatest challenges our industry will face is to offer products and services at a reasonable profit to ensure a company's success. Competition is good, but if it forces prices down so far as to not be profitable, businesses will fail."

Thanks to stiff competition from off-premise venues and with on-premise facilities at capacity, "we need to raise prices to continue to grow revenues," notes Brian Comes, CMP, LES, director of catering/convention services at the Hyatt Regency San Diego hotel. "I also struggle with DMCs who take `our' clients off property with `cheaper caterers.'"

Making the problem worse is the tight labor market. "The struggle to hire, train, motivate and retain quality service personnel continues to limit the ability to increase sales, improve creativity and grow the organization," Comes says. To compete, "We continue to focus on the corporate off-premise market in hopes of increasing market share."

THE SHOCK OF THE NEW New technology presents new potentials and new pitfalls.

"Many clients can now do research via the Internet that they used to come to us for," notes Steve Kemble, head of Dallas-based Steve Kemble Event Design. "They can pretty much find the concepts for their Moroccan theme event on the Net. Yet implementation of the concept is a huge factor in whether the event is successful or not. For that, we hold the knowledge and the resources."

Kemble says it is important to stay abreast of new technology before it broadsides the business.

"When a client tells me they are going to do their annual conference via webcasting, I faint!" he says. "To me, what this means is that I have just lost three parties. I want to know, is this a service I need to become more educated on so I can offer it to my client?"

Event professionals have a variety of strategies for boosting business in 2001.

For designer Sean DeFreitas of Designs by Sean, Dania, Fla., this means honing his creative edge. "People want new ideas and new approaches to design for an event," he says. "We don't want to do the same party over and over; therefore, we need to move to the next level with our thoughts and mix them with tradition and create new looks."

DeFreitas expects his business to grow by 30 percent in 2001 and maintains that collaboration will triumph over competition. "I have found that to deal with all the challenges of the new year, many because of growth, I have turned to my colleagues in the industry, teaming up and collaborating on projects together," he says. "This industry is large enough for all of us to get business."

While some event professionals plan to go after new clients, others are looking at broadening their range of services with existing clients.

"EventWorks has been and hopes to get more involved with the production of business meetings," says Janet Elkins, president of the Los Angeles-based special event producer. "We have the know-how; the challenge is having companies trust us who have pigeonholed us as providing a different service."

To spread the word about her company's full range of capabilities, Elkins plans an aggressive marketing campaign. "It seems hard for us to spend too much time and money on advertising, but we do plan at least two newsletters, continuing going to trade shows and making a point to stay personally involved with the clients we do have, making sure the relationships stay strong."

TAKING CARE OF BUSINESS For some event professionals, the focus will be on professionalizing their business operations.

"We are continually re-evaluating the traffic flow of paperwork, inter-office communications and management," says Matthew David Hopkins, head of New York-based event de-signer and production company Matthew David. "We have moved our production and storage to a separate location and are taking advantage of technology to keep us well connected. We are also pursuing [moving] our marketing and public relations to a local source so we can focus on the clients themselves."

Event planner Charles Massey, CMP, head of Synaxis Meetings & Events of West Hollywood, Calif., calls the process "working smarter. We have hired a database administrator as a part-time consultant to manage our information, freeing us up to be more strategic," he says. Also, "Our Web site will be coming online soon."

One of the most encouraging signs for the profession, these events pros say, is the growing recognition of and demand for their services. "Our industry is now much more recognized and, best yet, respected by the consumer," Andonoplas says. "We are now getting to be a given."

Kemble agrees: "As [clients] continue to search for and hire professionals who are members of industry associations, attend industry gatherings and study industry publications, this will continue to open more and more opportunities for future growth."